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Can Qualcomm (QCOM) Keep the Earnings Streak Alive? - Analyst Blog

Qualcomm Incorporated
(
QCOM
) is slated to release its second-quarter 2014 financial numbers
after the closing bell on April 23, 2014.

In the previous quarter, the company's earnings beat the Zacks
Consensus Estimate by a margin of 2.7%. Let's see how things are
shaping up for this announcement.

Factors to Influence This Quarter

Qualcomm is poised to benefit from the steadily growing demand
for 4G LTE-enabled mobile handsets in developed countries, rapid
transition from 2G to 3G/4G in China and other emerging markets
and increasing licensing revenues. The growing acceptance of LTE
technology has prompted mobile handset manufacturers to develop
phones that will be compatible with this network. Qualcomm has
fortified its leadership position in the high-end smartphone
segment.

Recently, Qualcomm announced that the "Fire TV" set-top box
launched by Amazon.com Inc. runs on Qualcomm's next-generation
quad-core Snapdragon 600 microprocessor. The company also
revealed that it is working toward improving the performance of
its high-end Snapdragon processors. Also, smartphones integrated
with the latest Snapdragon 808 and 810 processors will be
available from early 2015.

On the flip side, aggressive competition in the mobile phone
chipset market may hurt Qualcomm's profits in the upcoming
quarters. The company is facing severe competitive threat from
rival
Intel
(
INTC
), which has been redesigning chipsets for the mobile computing
market. Intel has initiated the shipment of its first multi-mode
LTE baseband modem. Competition is also likely to emanate from
formidable rivals like
Broadcom
(
BRCM
) and
Nvidia
(
NVDA
).

Earnings Whispers

Our proven model does not conclusively show that Qualcomm is
likely to beat the Zacks Consensus Estimate this quarter. This is
because a stock needs to have both a positive Earnings ESP and a
Zacks Rank #1, 2 or 3 for this to happen. Unfortunately, this is
not the case here as elaborated below.

Zacks ESP:
This is because both the Most Accurate estimate and the Zacks
Consensus Estimate are poised at $1.09. This leads to an ESP of
0.00% for Qualcomm.

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